You can link a credit card to your PayPal account and use it to pay for purchases, but PayPal charges a fee if you use it as a credit card rather than as a funding source
PayPal lets you connect a credit card in two ways: as a backup payment method (which PayPal charges no fee to use) or as your primary funding source (which costs you a percentage of each transaction). Most people link their card as a backup, meaning PayPal pulls money from your bank account first, then uses the credit card only if that account has insufficient funds. If you want to use the credit card as your main payment method, you'll pay a fee — usually 2.9% plus $0.30 per transaction for goods and services, or a lower percentage for money transfers between people.
The process itself takes about five minutes. You enter your card details once, and then PayPal remembers it. After that, you choose which payment method to use each time you check out, or you can set a default. The credit card appears in your PayPal wallet alongside any bank accounts you've linked.
Key Takeaways
- Linking a credit card to PayPal costs nothing, but using it to pay triggers a fee unless it's your backup method and your primary account has no funds.
- PayPal charges 2.9% plus $0.30 when you use a credit card as your main payment source for purchases, so you're essentially paying interest on top of any card interest.
- You can add a credit card in your PayPal wallet settings, and it takes about five minutes to complete the verification.
- At checkout, you can choose which payment method to use, or set a default card so PayPal uses it automatically.
- Some credit cards offer rewards on PayPal purchases, so linking the right card can offset the fee if you spend enough.
How to add a credit card to your PayPal account
Log into your PayPal account on a computer or the mobile app. Click the gear icon (settings) in the top right corner, then select "Wallet" or "Payment methods" depending on which version you're using. Click "Link a card" or "Add a card." Enter your card number, expiration date, CVV (the three-digit code on the back), and the billing address associated with the card.
PayPal will ask you to confirm the card is yours. Some cards require you to verify through your bank's app or website — you'll see a prompt to do this. Others verify automatically. Once verified, the card appears in your wallet and is ready to use. You don't need to do anything else unless you want to set it as your default payment method.
The difference between a backup card and a primary payment method
A backup payment method is a card PayPal uses only if your linked bank account doesn't have enough money. PayPal charges no fee for this. If you have $50 in your checking account and you try to send $100 through PayPal, PayPal will pull the $50 from your bank and the remaining $50 from your credit card — but you won't pay PayPal's transaction fee on that $50.
A primary payment method is the card you choose to pay with at checkout, or the one you set as your default. Every transaction using this card as your main funding source costs you 2.9% plus $0.30. If you spend $100, you pay $2.90 plus $0.30 = $3.20 to PayPal on top of whatever your credit card company charges. This stacks with any interest your card charges if you carry a balance.
Most people should link their card as a backup only. Use it as a primary method only if you're sending money to another person (which has lower fees) or if your credit card offers enough rewards to cover PayPal's cut.
When PayPal charges a fee for credit card payments
PayPal's fee structure depends on what you're paying for. For goods and services — anything you buy from a seller — the fee is 2.9% plus $0.30. For money transfers between people (sending money to a friend), the fee is 1.75% if you use a credit card, compared to no fee if you use a bank account. For invoices you receive as a business, the fee is the same as goods and services: 2.9% plus $0.30.
These fees explore only when you actively choose the credit card as your payment method. If PayPal uses your card as a backup because your bank account ran dry, you typically don't pay the fee — though this varies by transaction type, so check your receipt after the payment clears.
Some sellers on platforms like eBay or Etsy have already built PayPal's fee into their prices, so you're paying it whether you know it or not. That's a reason to read the total price before you commit to checkout.
How to choose which card to use at checkout
When you're ready to pay through PayPal, you'll see a screen showing all your linked payment methods — bank accounts, credit cards, and any PayPal balance you have. Click the card you want to use. If you want PayPal to remember this choice and use it automatically next time, look for a checkbox that says "Make this my default payment method" or similar wording (the exact text varies by device and PayPal version).
You can change your default at any time by going back to your wallet settings and selecting a different card. You can also override your default at checkout by clicking a different payment method before you confirm the purchase.
Credit card rewards and whether they offset PayPal's fee
Some credit cards offer bonus rewards on PayPal purchases — typically 2% to 5% cash back or points. If your card gives you 3% cash back on PayPal transactions and PayPal charges you 2.9% plus $0.30, you're breaking even on the percentage but still paying the $0.30 flat fee. On a $100 purchase, you'd earn $3 in rewards but pay $3.20 in fees, netting a $0.20 loss.
The math works in your favor only if your card's rewards rate is higher than PayPal's fee rate, or if you're sending money to another person (where the fee is lower). Check your card's terms to see if it specifically rewards PayPal purchases, and calculate whether the reward covers the fee before you use it as your primary method.
What to do if your card is declined or won't link
If PayPal won't accept your card, the most common reasons are: the billing address doesn't match what your bank has on file, the card has expired, the CVV is wrong, or your bank is blocking the transaction. Start by double-checking the address — use the exact spelling and format your bank uses, including apartment numbers or suite numbers if applicable.
If the address is correct, contact your credit card company and ask if they've blocked PayPal transactions. Some banks flag PayPal as high-risk and decline the link by default. Your bank can remove the block, and then you can try linking again. If that doesn't work, try a different card if you have one, or use a bank account instead — PayPal accepts those with no fee.
Frequently Asked Questions
Does PayPal charge a fee just for linking my credit card?
No. Linking costs nothing. You only pay a fee when you actually use the card to make a payment and you've chosen it as your primary payment method. If it's your backup card and your bank account has funds, there's no fee.
Can I use a credit card to send money to a friend through PayPal?
Yes, but it costs more. Sending money to another person with a credit card costs 1.75%, while using a bank account is free. You'll see the fee amount before you confirm, so you can decide whether to proceed or switch payment methods.
What happens if I link a credit card but don't use it?
Nothing. PayPal doesn't charge you for linking or for having a card in your wallet. You only pay when you select it as your payment method during checkout. You can keep it linked indefinitely without any cost.
Can I remove a credit card from PayPal after I've linked it?
Yes. Go to your wallet settings, find the card, and click "Remove" or "Delete." If it's your default payment method, PayPal will ask you to choose a new default before you can delete it. You can re-link the same card anytime.
Will using PayPal with a credit card hurt my credit score?
Using PayPal itself doesn't affect your score. However, the credit card you link will report the transaction to your card issuer, which counts toward your credit utilization (how much of your available credit you're using). If you're carrying a balance, this could slightly lower your score, just as any purchase would.